Retail

Although the slight decline in the overall cost of certain staple food items provided some relief at the end of last year, US consumers are not likely to be dancing with joy in the aisles of their local grocery stores in the near future, according to the latest American Farm Bureau Federation (AFBF) Marketbasket Survey.

“Despite the recent collapse in oil prices and steep declines in farm commodity prices, food prices have not yet declined significantly and may not for quite some time,” said AFBF economist Jim Sartwelle. “Sticky prices, once a somewhat obscure economic concept to most food consumers, are the new reality as we move into 2009.”

However, if the new year brings lower global demand for US commodities as the world economic turmoil continues, retail food prices may moderate somewhat, according to Mr Sartwelle.

US retail food prices at supermarkets decreased slightly during the fourth quarter of 2008, according to the AFBF’s survey, which indicated that the total cost of 16 basic grocery items was US$48.19, down about 1 per cent or US$0.49 from the third quarter of 2008.

Of the 16 items surveyed, 11 decreased and five increased in average price compared with the 2008 third-quarter survey. The overall cost of the marketbasket items in the fourth quarter of 2008 increased by 7 per cent compared with the first quarter of 2008, which tracks closely with the federal government’s Consumer Price Index for all food during a similar time period, according to AFBF.

Apples, flour, cheddar cheese and bacon showed the largest retail price decreases. Apples dropped US$0.29 to US$1.51 per pound; flour dropped US$0.16 to US$2.46 for a 5-pound bag; cheddar cheese decreased US$0.15to US$4.76 per pound; and bacon decreased US$0.14 per pound to US$3.37.

Several survey items dropped in price by 10 cents or less including a five-pound bag of potatoes, which decreased by US$0.02 to US$3.36.

According to USDA statistics, US consumers spend just under 10 per cent of their disposable income on food annually, the lowest average of any country in the world. A total of 133 volunteer shoppers in 37 states participated in the latest survey, conducted during October.